Foot Locker (FL)

NEW YORK, NY, August 22, 2007 — Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its second quarter ended August 4, 2007.

Second Quarter Results
The Company reported a net loss of $18 million, or $0.12 per share, for the second quarter ended August 4, 2007 compared to net income of $14 million, or $0.09 per share, last year. Second quarter sales decreased 1.5 percent, to $1,283 million this year compared with sales of $1,303 million for the corresponding prior year period. Second quarter comparable-store sales decreased 7.3 percent.

“Our second quarter results reflected lower than expected sales and the impact of a strategic decision to significantly accelerate the clearance of slow-selling merchandise inventory in our U.S. stores,” stated Matthew D. Serra, Foot Locker, Inc.’s Chairman and Chief Executive Officer. “This inventory clearance strategy resulted in markdowns increasing in our U.S. stores by $50 million, at cost, or $0.20 per share, versus the second quarter of last year. As a result, we are now better positioned to offer more exciting and compelling products for the fall season. At the same time, the division profit of our international stores increased approximately 20 percent from the same period last year, (excluding the $17 million pre-tax charge recorded in 2006 to write down long-lived assets pursuant to SFAS 144).”

Year-to-Date Results
For the first six months of the year, the Company reported a net loss of $1 million, or $0.01 per share, compared with net income of $73 million, or $0.47 per share, last year. Year-to-date sales decreased 2.6 percent to $2,599 million compared with sales of $2,668 million last year. Comparable-store sales decreased 6.2 percent.

Financial Position
At the end of the second quarter, the Company’s cash and short-term investments totaled $363 million. The Company’s cash position, net of debt, increased by $86 million from the same time last year. During the second quarter, the Company repurchased 1.1 million shares of its common stock for $24 million. For the first six months of the year, the Company repurchased 2.3 million shares for $50 million.

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